Should I buy a new or used car?

Deciding between a new or used car can be a tricky decision to make.

On the one hand, a new car has a lot to offer. You’ll be the first owner, you’ve got warranty coverage and you’re in a brand-new model with the latest technology.

However, a used car can sometimes get you more for your money or an equivalent model at a significant discount. But, you need to factor in warranty costs, MOTs and servicing.

If you’re finding yourself unsure which option to choose, this guide is here to help you make a decision.

Buying a new car

A new car is one fresh from the forecourt, with you as its first owner. Opting for a new car means you’re in one of the very latest models. It’ll also be covered by a manufacturer warranty and you won’t need to worry about MOT tests for the first three years. You’ll also be able to configure a car to your precise specification if you’re happy to wait for a ‘factory order‘, or the dealer should be able to find you a stock car that closely matches what you’re after.

Plus new-car finance packages tend to be more attractive than those offered with second-hand models, with lower interest rates, and discounts and deposit contributions more common.

However, new cars obviously have significantly higher prices than equivalent used models, while the tend to depreciate (lose value) more quickly, too.

Pros of buying a new car:

You’re the first owner

There’s something nice about being the first and only owner of a car. That nice new touchscreen has never been used by anybody else, yours is the first bottom to sit in the driver’s seat. You’ll know there are no hidden signs of misuse to worry about, either.

You can spec it exactly how you want it

If you’re ordering a new car, you get the privilege of deciding exactly how you want it. You’ve got the choice of colour, equipment and wheels, plus any accessories you fancy.

You’ll get a full manufacturer warranty

Every new car will be covered by a manufacturer warranty from the date it’s registered. That means you’ll get to take advantage of its full coverage should any issues arise during ownership.

No need to worry about MOTs (for a while)

New cars don’t need an MOT until three years after they’re registered.

Cons of buying a new car

You’ll likely pay a higher price

New cars tend to cost more than comparable used cars. You’ll also have to take the depreciation (the value it loses over time) that comes with buying a new car, too. New-car prices have also increased a fair bit over the past couple of years, and while this has also been true of the used market, second-hand prices can be quicker to respond to market changes than manufacturers can be to alter their list prices.

You may have to wait a while for it

As exciting as choosing your car can be, it does mean you’ll have to wait for it. Depending on your model, this could range anywhere from a few weeks to over a year, with manufacturing delays and chip shortages still impacting the car industry – though things are getting better for many manufacturers.

You may have a higher insurance premium

This will depend on your chosen model, but the higher value of new cars and the increased cost of replacement parts may result in pricier insurance premiums.

Buying a used car

A used car is one with a previously-registered owner that’s covered more than delivery miles.

Used cars can vary wildly from ‘nearly-new’ ex-demonstrators with a few hundred miles on to well-worn workhorses with five owners and 200,000+ miles, or anywhere in between.

They tend to cost cheaper than new cars, but you don’t always get the luxury of a warranty and will have to be mindful of MOTs.

Pros of buying a used car

You’ll get significant savings compared to new cars

The biggest draw of a used car is the significantly lower outright cost compared to a new one. This is particularly the case if you go for older models which have already depreciated a significant amount.

You could get more car for the money

You may find the money you’d spend on a new car could get you a higher-spec used car for the same amount.

You don’t need to wait

While you’ll need to wait for delivery of your new car, a used car already exists of course — meaning you could get it more or less instantly.

Cons of buying a used car

You may not have a warranty

As a manufacturer’s warranty runs from the day a car is registered, it may have expired by the time you purchase it. Even if it’s still covered, you’ll have a reduced period compared with a new example.

However, you could take out an extended car warranty which covers the cost of diagnosis, labour, and parts should something go wrong with your car beyond the remaining manufacturer warranty period. carwow has partnered with MotorEasy who provide extended car warranty cover. Simply enter your details to get an instant quote and save 11% on the cost.

Issues are more likely

A used car that’s seen some wear and tear is generally more likely to be prone to issues than a new example. This will of course vary depending on how well (or poorly) previous owners looked after it.

You’ll be responsible for servicing and MOTs in most cases

Though new cars don’t need an MOT initially and you can often get servicing packages, this isn’t usually the case with used cars.

Used cars older than three years will be required to have an MOT test every year, which you’ll be responsible for. You’ll need to factor annual servicing costs in, too.

Is buying nearly new or ex-demo the best compromise?

It can be, though the definition of ‘nearly new’ is a little more involved than it might be.

Nearly new cars, in the traditional sense of the term, are cars that are under a year old and have fewer than 5,000 miles on them. They might have been used by a dealership as a ‘demonstrator’ (IE ex-demo) for potential customers, or they might been used by dealership staff for commuting duties. In both these instances they will often be high-specification models fitted with plenty of features and options.

Nearly new cars can also just have been moved on by private individuals who wanted a change, or in some circumstances may be ex-rental models – though hire cars tend to cover high mileages.

Pre-registered cars, meanwhile, are a different proposition entirely. Dealers and regional offices of global car manufacturers have sales targets to hit each quarter, and registering a car with the DVLA effectively makes it no longer the manufacturer’s – IE sold – helping targets be met, and bonuses achieved.

You will be the car’s second legal owner of a pre-reg car if you buy it – although pre regs should have low ‘delivery miles’ on the clock, just as a new car would.

For all of the above scenarios, you will not be the first keeper of the car, which is likely to affect its residual values. Nearly new and ex-demo cars need to be bought in a manner similar to second-hand cars – IE with a close eye on condition, damage and provenance – so be sure to perform a history check on the car, and find out how much manufacturer warranty is remaining.

Also note that the finance deals offered on cars that are not brand new tend not be as attractive as those offered with box-fresh models, so you’ll need to be sure that any discount applied to the car comfortably offsets a higher interest rate, for example.

Is it worth buying a new car or a used car?

Whether you opt for a new or used car will come down to what you’re looking to get for your money. Below are some examples for each:

You should buy a new car if:

• You want to spec your car to your liking
• You want the latest model
• You want to be the first owner of your car
• A manufacturer warranty is important to you

You should buy a used car if:

• You want to save on the upfront cost of a car
• You’re looking for the most car for the money
• You don’t want to wait for the delivery of a new car
• You’re happy to offset the lower price with potentially higher maintenance costs

You should buy a nearly new or ex-demo car if:

• You want a new-ish car but are after a chunky discount
• You don’t mind not being the first registered owner of the car
• You are confident in your ability to inspect the vehicle and its history
• You’ve done your sums carefully re finance deals Vs discounts

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